mmO2 looks set for first ever dividend

Earlier than expected

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mmO2 is to pay its maiden dividend earlier than expected after a strong performance in the first half of 2004.

The UK-based mobile operator, which reported its half-yearly results today, has grown group revenues by 23 per cent for the six months ending 30 September to £3.285bn, compared to £2.680bn a year earlier.

The rise was due primarily to strong customer growth and higher ARPU (Average Revenue Per User) across the company's three mobile operating businesses in the UK, Germany and Ireland.

Net income shot up to £236m, or £0.027 per share, from £23m, or £0.003 in 2003. Group operating profit was also up on last year, from £66m in the first half of 2003 to £251m in 2004.

From the beginning of the 2005 fiscal year, mm02 intends to pay an interim dividend in January 2005 and a final dividend in August. The final payment will be two-thirds of the total sum.

"The new policy reflects our confidence in the company's future prospects, and our commitment to deliver returns for shareholders," said David Arculus, chairman of mmO2.

The group's three markets showed good individual performances.

Both the UK and German markets added significantly to their customer numbers during the first half of the year. UK subscribers came to 13.86 million, up 10 per cent on the previous year; and Germany had a busy first half, adding 27 per cent more customers to create a base of 6.67 million.

Turnover in these markets was also impressive; the UK posted revenue of £2.037bn, up from £1.651bn, while German revenues amounted to £877m from £719m.

O2 Ireland posted revenue of £280m, up from £260m a year earlier. Operating profit before goodwill and exceptionals grew 10 per cent to £74m.

The main growth driver in Ireland was new customer acquisition, with customer figures growing by 12 per cent year-on-year to 1.425 million, of which 27.6 per cent were contract customers. The all-important blended ARPU figure grew 1.6 per cent, to €560, driven by both voice and data, with average minutes of use per customer increasing to 203 per month, from 192 last year. Data ARPU was also up eight per cent to €119

mmO2 forecasts continuing revenue growth across its three markets for the remainder of its fiscal 2004 year.